THIS DAY IN HISTORY

Standard Oil geologists arrive in Saudi Arabia

On September 23, 1933, a party of American geologists lands at the Persian Gulf port of Jubail in Saudi Arabia and begins its journey into the desert. That July, with the discovery of a massive oil field at Ghawar, Saudi King Abdel Aziz had granted the Standard Oil Company of California a concession to “explore and search for and drill and extract and manufacture and transport” petroleum and “kindred bituminous matter” in the country’s vast Eastern Province; in turn, Standard Oil immediately dispatched the team of scientists to locate the most profitable spot for the company to begin its drilling.

As automobiles and other internal-combustion machines proliferated, both in the United States and around the globe, Standard Oil was eager to control as much of the market for gasoline as it could. As a result, it would do almost anything to have first dibs on Saudi oil. The partnership between Abdel Aziz’s government and Standard Oil became known as the Arabian American Oil Company (Aramco). (Texaco soon joined the partnership; about a decade later, so did Standard Oil of New Jersey and Socony-Vacuum Oil.) The company promised to provide the Saudi government with a steady income, along with an outright payment of 50,0000 British pounds; in return, Aramco got exclusive rights to all the oil underneath the eastern desert. In 1938, the company’s gamble (after all, while Aramco engineers knew there was oil in the region, no one knew exactly where or how much) paid off: its geologists and drillers discovered oil in “commercial quantities” at the Dammam Dome, near Dhahran. The next year, Aramco exported its first tanker-load of petroleum.

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In 1950, once it had become clear how very much oil there was under that desert, Aramco agreed to split its profits with the Saudi government. In 1980, after several years of squabbling over the price and availability of the country’s petroleum (Saudi Arabia was a founding member of the Organization of the Petroleum Exporting Countries, or OPEC, whose 1973 embargo precipitated a massive fuel crisis in the United States and other parts of the industrial world), Saudis won total control of the company: It’s now known as Saudi Aramco. The next year, the kingdom’s oil revenues reached $118 billion.

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